Below is the text of Prime Minister's Question Time from 19th October 1993.

PRIME MINISTER:

Engagements

Q1. Mr. Mandelson : To ask the Prime Minister if he will list his official engagements for Tuesday 19 October.

The Prime Minister (Mr. John Major) : This morning, I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.

Mr. Mandelson : Does the Prime Minister agree that the task of the Budget is to raise revenue without preventing recovery? Does he also agree that at least £5 billion worth of revenue is being avoided by individuals, companies and wealthy foreigners who are abusing the tax system? As that is twice the amount that would be raised if VAT were applied to fuel, will he give an assurance this afternoon that, in the forthcoming Budget, he will ensure that the interests of pensioners and families are put before those of tax dodgers?

The Prime Minister : We have done a great deal in recent years to try to cut out tax avoidance. In each and every Budget my right hon. and learned Friend the Chancellor will examine that matter to see whether there is more to be done. It is right that that should be done ; it will be done.

As for the recovery, I think that the hon. Gentleman will concede that it seems to have taken root--the evidence for that is becoming unmistakable. The hon. Gentleman does not dispute that, but if some of his hon. Friends care to dispute it perhaps they should look at the forecasts by the Organisation for Economic Co-operation and Development, by the International Monetary Fund and by the European Commission--quite apart from domestic forecasts.

Q2. Sir Thomas Arnold : To ask the Prime Minister if he will list his official engagements for Tuesday 19 October.

The Prime Minister : I refer my hon. Friend to the answer I gave some moments ago.

Sir Thomas Arnold : Can my right hon. Friend assure the House that the deregulation Bill that the Government propose to introduce in the next Session of Parliament will be both tough and effective? Is not that the best way to strengthen the successful supply side measures of the 1980s?

The Prime Minister : Yes, I agree with my hon. Friend about that. We made great strides in the 1980s in supply side changes and in making the economy more competitive, and we now have to build on them both at home and abroad. I can confirm that there will be a deregulation Bill in the next Session ; a Bill which I believe is of the utmost importance for British business and in particular for British manufacturing industry.

We know that the route to more jobs is less regulation and less Government red tape, and we propose to introduce legislation to achieve that.

Mr. John Smith : Does the Prime Minister have the remotest appreciation of the overwhelming hostility throughout the nation to imposing VAT on domestic fuel? In addition to its obvious unfairness, is there not now evidence that the Government's tax increases imperil consumer confidence and any hope of a recovery? In these circumstances, will the right hon. Gentleman now abandon these foolish proposals?

The Prime Minister : I think that the right hon. and learned Gentleman knows--both I and my right hon. and learned Friend the Chancellor of the Exchequer have made the position clear--that the extra VAT is a vital part of our policies to reduce public borrowing, but we will offer help to vulnerable people.

If the tax is as obnoxious as the right hon. and learned Gentleman claims, why did the Labour conference vote

"for a general shift in taxation towards energy resource use". What is that other than VAT?

Mr. John Smith : Let me remind the Prime Minister that during the last election campaign he claimed that the difference between the parties was that he would not increase taxes ; in particular--he must remember this point--he would not increase or extend VAT or impose taxes on income.

Does he deny that he has now imposed swingeing increases on VAT, and is increasing national insurance contributions from 9 to 10 per cent? If the latter is not a tax on income, what is? Will the Prime Minister now apologise for the Conservative party's deceit at the last election?

The Prime Minister : The right hon. and learned Gentleman has been caught out, and everyone will have noticed that he did not respond remotely to my question.

It is high time that there was a sensible debate on the issue, during which the Opposition could tell the public the truth about their policies on VAT and domestic fuel. As the Labour party's own journal made clear in summer, the party has been quite clearly considering

"energy tax and taxing polluting activities".

However much the right hon. and learned Gentleman wriggles to make cheap party political points, he cannot escape the reality of his party's commitments.

Mr. John Smith : Will the Prime Minister explain how he has escaped from the reality of his promise to the public that there would be no tax increases when, within months, he has increased them? Does he accept that a result of the Government's tax increases is an increase in the burden on ordinary families by £8.50 per week? Why does he not close tax loopholes that cost billions of pounds before he puts burdens on ordinary families?

The Prime Minister : The right hon. and learned Gentleman is slipping around a little this afternoon, and he has been slipping around rather a lot on this policy for a few months. However, he cannot wriggle out of the fact that what I have quoted to him was Labour party policy. It was only after we introduced the policy that he opportunistically changed his mind and his policies and moved to an all-purpose attack on politics generally. We need to cope with the fiscal deficit and we have the courage to do so.

Rev. Ian Paisley : The Prime Minister will remember that, time and time again, he has emphasised in the House and elsewhere that he would not negotiate with those who engage in or support violence. He will be well aware today that the IRA violence is continuing and that Gerry Adams last weekend became an apologist for that violence. Why has the Prime Minister of the Irish Republic announced that the right hon. Gentleman will engage in discussions with the Taoiseach at the end of the month concerning the agreement reached between IRA Sinn Fein and the hon. Member for Foyle (Mr. Hume)?

The Prime Minister : I know nothing of the details of the agreement reached between the hon. Gentleman and Gerry Adams. Whatever statement may have been made by the Taoiseach in the Irish Parliament has not been cleared with me. I have had regular discussions with the Taoiseach covering a wide range of issues. If the Taoiseach wishes to raise with me matters that he believes will bring the violence in Northern Ireland to an end, I am compelled to listen.

I repeat to the hon. Gentleman and to the House that we do not negotiate with terrorists or with people who deal with bullet and bomb. We will not surrender to their violence, either now or in the future.

Mr. Ashdown : As the Prime Minister is personally responsible for intelligence matters, will he tell the House whether the Minister for open government was correct in his statement that intelligence on the sale of British arms and equipment to Iraq went into the state machinery but did not appear to come out at the right place?

The Prime Minister : As the right hon. Gentleman knows, I set up a very wide-ranging inquiry under Lord Justice Scott to look at the whole question of United Kingdom arms exports to Iraq, including the use of third countries as channels. While that matter is under discussion and consideration by Lord Justice Scott, it would be prudent for me and the right hon. Gentleman to wait for the outcome of that inquiry.

Q3. Mr. Nigel Evans : To ask the Prime Minister if he will list his official engagements for Tuesday 19 October.

The Prime Minister : I refer my hon. Friend to the answer I gave some moments ago.

Mr. Evans : Does my right hon. Friend agree that a platform on law and order which included the policies of fining the victims of crime, legalising dangerous drugs and keeping criminals out of prison would find a suitable home only in the Monster Raving Loony party, perhaps led by one of our High Court judges?

The Prime Minister : I do myself believe, as I have made clear, that prison is effective. I certainly support its use, where appropriate. None of us seeks an antiquarian prison system, but I want an effective prison system. [Interruption.] Unlike the hon. Member for Newham, North- West (Mr. Banks), who undoubtedly cried out, "Oh, oh", I believe in prison as a punishment as well as a deterrent. I am far more worried about innocent people having to barricade themselves in at night than I am about the guilty being locked up. That, I must say to the hon. Gentleman, is not only my view and that of the police. I think that it is the overwhelming view of people in this country.

Q4. Mr. Spellar : To ask the Prime Minister if he will list his official engagements for Tuesday 19 October.

The Prime Minister : I refer the hon. Member to the answer I gave some moments ago.

Mr. Spellar : When does the Prime Minister intend to stop hiding behind procedure and come clean about the secret sources of Tory party funding?

The Prime Minister : I must let the hon. Gentleman into a secret. There are a great many secret sources and they are all cheese and wine parties up and down the country.

Q5. Mr. David Evans : To ask the Prime Minister if he will list his official engagements for Tuesday 19 October.

The Prime Minister : I refer my hon. Friend to the answer I gave some moments ago.

Mr. Evans : Is my right hon. Friend aware that, in stark contrast to the shambles of the lot opposite at their conference, we want to congratulate our leader on a brilliant speech at our conference? Could he tell me whether members of our Front Bench are all sponsored by unions and whether it was our conference that voted to reintroduce nationalisation? If it was not us, was it the lot opposite, led by the buddha from Monklands, East?

The Prime Minister : I can certainly undertake to my hon. Friend that, so far as I am aware, none of my hon. Friends is sponsored by the trade unions in the manner of the Labour party. But I believe that at Brighton we saw the true face of the Labour party : in favour of clause 4 and seeking to abolish grant-maintained schools and GP fund holders, to renationalise the water industry, and to scrap Trident. The leader of the Opposition gave the trade unions everything that they asked for. A minimum wage--he did it. Wages councils--he would keep them. The social chapter--he would adopt it. More Government spending--he wants it. For what? The unions still control 70 per cent. of the Labour party's policies, one third of the right hon. and learned Gentleman's election and 100 per cent. of the right hon. and learned Gentleman's policy.

Q6. Mrs. Roche : To ask the Prime Minister if he will list his official engagements for Tuesday 19 October.

The Prime Minister : I refer the hon. Member to the answer I gave some moments ago.

Mrs. Roche : As the Institute of Management survey has found that three out of four managers do not believe that the recession will end in 1994, will the Prime Minister tell the House why British managers do not accept his Government's economic policies?

The Prime Minister : The hon. Lady was obviously otherwise engaged a few moments ago when I stated in reply to an earlier question the number of external sources that now say quite clearly that the recession ended some time ago and that the recovery is proceeding. To remind the hon. Lady, I shall add to that list. She may have missed the latest survey from the London Chamber of Commerce, the 3i survey, the fact that unemployment has fallen again, the OECD survey, the Commission report and the IMF report. If she has missed all that, I am surprised, but I hope that others have not.

Sir Anthony Grant : Is my right hon. Friend aware that the Select Committee on Trade and Industry has just visited west Germany where we heard again and again complaints that high social costs were causing rising unemployment there? We also heard again and again how wise Britain was under my right hon. Friend's leadership to opt out of the wretched social chapter.

The Prime Minister : I think that it is clear right across Europe that people want decent social provision. That is not the point at issue. The point at issue is whether social provision is increased to such an extent for those in work that it keeps others out of work and renders the whole of Europe uncompetitive with the Pacific basin, Japan and the United States. Everybody who criticises the Government's stance should bear in mind that, with the same amount of growth in the last quarter of a century the United States has created four times as many jobs as have been created across Europe. Those who care about employment would do well to ponder that statistic.